The court upheld the principle of rendering accounts and appointing an independent auditor to verify revenue in cases of trademark infringement, rejecting the defendant's attempt to claim confidentiality over the documents submitted to the independent auditor.

JUDGMENT

Amit Bansal, J.

I.A. 2479/2020 (u/s 151 CPC for summoning of the records) and I.A. 2480/2020 (O-XI R-5 of CPC)

1. By way of the present judgment, I shall dispose of I.A. No.2479/2020 filed under Section 151 of the Civil Procedure Code, 1908 (CPC) and I.A. No.2480/2020 filed under Order XI Rule 5 of the CPC for production of documents.

BRIEF FACTS

2. The brief facts insofar as are relevant for deciding the present applications are set out below.

3. The plaintiffs are the owners of various registered marks including `TRIMAX. in relation to stationery products such as writing instruments, correction pens, glue sticks, etc.

4. Since the year 1986, the defendant was a licensee of the plaintiff companies and was manufacturing pens and other stationery instruments using the trademarks of the plaintiffs, pursuant to a license agreement. Last such license was granted to the defendant vide license agreement dated 9th April, 2010.

5. The aforesaid license was terminated by the plaintiffs vide letter dated 1st September, 2015 w.e.f. 1st March, 2016.

6. It was the case of the plaintiffs that the defendant continued to use some of the trademarks of the plaintiffs even after termination of the license agreement and therefore, the present suit was filed on 17th August, 2016.

7. It was noted in the order dated 17th November, 2016 passed in the present suit that the defendant shall not use the trade mark `T-MAX..

8. On 3rd May, 2017, issues in the suit were framed. The issues relevant for the purposes of the present applications are set out below:

"6. Whether the plaintiffs are entitled to a decree of rendition of accounts against the defendants, as prayed for? OPP

7. Whether an independent auditor is required to be appointed to audit the accounts the defendant? OPP

8. Whether the defendant has disobeyed any of the orders passed by this court? OPP"

9. An affidavit of unconditional apology dated 19th September, 2017 was tendered on behalf of the defendant for having used the trade mark `TERAMAX..

10. A judgment dated 26th November, 2018 was passed in the present suit. The relevant portion of the said judgment in relation to issue no.8 above is set out below:

"122. It is indisputable that the trademarks T-MAX and TERAMAX are phonetically similar to the trademark TRIMAX and, thus, both the trademarks are deceptively similar. The fact that the defendant had applied for registration of the brand TERAMAX in October, 2016 (which is prior to the order dated 17.11.2016) is of little relevance and does not, in any manner, establish that the adoption of the said trademark by the defendant is bona fide. Mr Sethi, learned senior counsel who was appearing for the defendant at the material time had thus, rightly not disputed that the trademark TERAMAX was deceptively similar to the trademark TRIMAX, and had tendered the affidavit of the Managing Director of the defendant expressing his unconditional apology. However, Mr Arun C. Mohan, the learned counsel who appeared for the defendant at the end of the final arguments, sought to contest the application filed on behalf of the plaintiffs; he contended that the trademark TERAMAX was not similar to TRIMAX. This is plainly unsustainable. It is also clear that even after tendering an unconditional apology, the defendant has continued to sell its product under the trademark TERAMAX.

xxx xxx xxx

125. In view of the above, the issue is decided in favour of the plaintiffs to the extent that the defendant has violated the orders passed by this court by selling writing instruments under the trademark `Teramax'."

11. In respect of issue no.6 relating to rendition of accounts, the relevant observations made in the judgment are set out below:

"Re: Issue no.6

Whether the plaintiffs are entitled to a decree of rendition of accounts against the defendants, as prayed for?

126. In view of the above, the plaintiffs are not entitled to profits made by the defendant in respect of products sold under the trade mark RORITO or